BENGALURU: Mindtree’s Board will meet again to decide on proposed buyback plans even as the promoters of the IT firm are trying to stave off a possible takeover bid by engineering major Larsen & Toubro.
On Friday last, the Bengaluru-based company had announced a board meeting to consider a share buyback.
“The Board considered the proposed buyback of equity shares of the Company at its meeting held on March 20, 2019. Following detailed discussions, the meeting has been adjourned to a future date,” it said in a regulatory filing to the BSE. “No decision has been taken in relation to the proposed buyback of equity shares.”
Experts say the Mindtree board cannot initiate a buyback when there is an open offer in place. L&T has appointed Axis Capital and Citigroup Global Markets as managers for the open offer.
Mindtree had announced the buyback plan to counter any hostile takeover after word spread that L&T would buy the stakes held by Coffee Day founder VG Siddhartha and his associate companies.
The engineering giant had sealed a deal with Siddhartha to buy his stake at `980 per share, totaling `3,269 crore. Further, it ordered its broker to buy another 15 per cent stake from the open at a price not exceeding `980 a share.
L&T has offered to buy a total of 66 per cent stake in Mindtree through various routes including buying Siddhartha share purchase, market purchases and open offer which is likely to cost over `10,000 crore.
While industry veterans and analyst call the L&T move as strategic, the firm denies its attempt to takeover IT services firm Mindtree is “hostile”, and terms it as a well thought and strategic fit to its existing services segment.
On Tuesday, Mindtree founders had termed the buyout bid as ‘hostile’. Led by Krishnakumar Natarajan, Subroto Bagchi, Rostow Ravanan and Parthasarathy NS, the promoters of Mindtree said they would unconditionally oppose the buyout move.
The three founders asserted the takeover bid was a grave threat to the unique organisation.